In this eBook, we’ll look at a more modern and accurate way of approaching routing cost.
June 22, 2017
A transportation management system (TMS) has one of the strongest ROIs for a 3PL or shipper: an average of about 7.5 percent in freight savings according to recent research by ARC Advisory Group.
It’s an especially valuable tool throughout the route planning process, when it can help guide you on how to deliver freight at the lowest cost while still meeting the order’s requirements.
The complexity of routing has increased in recent years, especially due to the addition of more and more dynamic factors. And yet many companies still think about route cost purely from a decision-making perspective: For every transportation option, there is a savings of one versus another.
This type of approach won’t achieve truly optimized and cost-effective transportation choices. What’s more, most TMS systems – because they were developed 15-20 years ago – cannot factor in constraints in real time that will help you determine for certain what the fastest and most efficient mode will be.
Your TMS must know and be able to use actual rates and service offerings to make the best modal decisions – and this cannot be done manually or with most of the TMS systems currently on the market.